The number of Scottish companies at a higher risk of insolvency dipped slightly between October and November, by 1.3% – the first monthly fall in nearly two years.

Just over one in three (35%) companies in Scotland is at higher than usual risk of insolvency in the next 12 months – a figure that has stayed relatively stable since August, following sharp rises in the first months of 2018.

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The percentage of companies at greater than normal risk of insolvency was, however, much higher than this time last year (November 2017: 25%). This rate of growth is in line with the rise in the proportion of all UK companies at higher than normal risk, which grew from 31% in November 2017 to 42%, according to research by insolvency and restructuring trade body R3.

Compared to Wales, Northern Ireland, and the nine regions in England, Scotland’s business sector has the lowest proportion of companies at elevated risk of insolvency. Northern Ireland comes in second, with 36%, while the South East of England has the highest percentage of businesses judged to be at greater than usual risk, at 47%.

Scotland’s hotel and pub sectors both saw a decrease in the proportion of companies at higher than usual risk between October and November, falling by 2.7% and 3% to reach 36% and 30% respectively.

The all-important retail sector, meanwhile, saw a month-on-month fall of 0.8% in the percentage of companies at elevated risk, meaning that 38% of Scottish retailers are currently judged to be at higher than usual risk of insolvency. This is the same proportion as for the UK overall.

Tim Cooper, chair of R3 in Scotland and a partner at Addleshaw Goddard in Edinburgh, said: “It’s good news that the proportion of Scottish companies at higher than normal risk of insolvency has fallen month on month.

"There is, though, no room for complacency, with wider uncertainty taking its toll on business and consumer confidence. For retailers and the hospitality trade, hopes will be pinned on the ‘golden quarter’ – the pre-festive season period where consumers loosen the purse strings, and are keen to banish the winter blues with a meal in a restaurant, or a night out.